Onwards to freedom!

Reading through this board, it's clear that mfw is not just about diverting money destined for a savings account to the mortgage account - it's also about making a little extra where possible, and reducing outgoings - more money on hand could allow for bigger overpayments.

The "all the small things" thread helped me realise that these changes don't have to be drastic. We're not going to cut down on the number of holidays we have etc, mfw is a marathon and I'm not prepared to scrimp over the next eight years just to pay it down, we're going to strike a balance that suits us. Paying down the mortgage quickly will be satisfying, but there's so much more to life too - we intend to enjoy it! Thing is, the small economies and micro earnings all add up, so it is possible to introduce a little mse into life without becoming a miserly hermit

Last week was pretty good...

• I took a packed lunch to work four days out of five, this is getting to be pretty standard by now.
• I used the confused motormate app to earn myself £25, cheque is in the post (sadly a one time only offer).
• After posting that I wouldn't bother with swagbucks, I decided I had nothing to lose so gave it a go in the end. Have just cashed in my first £5 amazon voucher, not bad for 7 days worth of idle time clicking... I'd estimate that it works out at something ridiculous like 30p an hour which sounds like it's not worth the bother, but we tend to web surf aimlessly in the evenings while watching tv anyway, so it's pretty much five pounds for nothing really, it's not "work"!
• Tesco clubcard emailed me to warn that some of my unspent vouchers were due to expire, converted £15 worth into a £45 gift voucher that I then spent on some excellent birthday gifts for family. Order value of £46.97 for £1.97 cash and some vouchers that needed using up - very pleased
• Done some research into earning from the web, not gone ahead with anything yet, but am slowly formulating a plan. This will be a very slow burn, especially as what I have in mind will take quite a lot of effort (but as it involves a hobby of mine the extra effort involved won't put me off, earning a few pence/pounds from having fun sounds awesome).
• An unexpected £1.57 appeared in my bank account courtesy of quidco, which was nice.
• Posted the signed confirmation letter to cashback credit card company, so as soon as that arrives I can use it to pay for food and petrol, and make a start on earning my £100 a year cashback.
• Convinced OH that transferring ISA and savings to better paying accounts was worth the bother (a few hundred pounds for very little effort is DEFINITELY worth the bother!!)

On the to do list for this week...

• See about opening a lloyds vantage account, 4% interest on up to 6k sounds great. I already have a halifax reward account for the free £5 each month, I could move the same 1k used to keep the halifax account active in and out of the lloyds account to keep it active too... Seems like a good idea.
• Try to put a little more effort into getting started with matched betting.
• Try to find the motivation to list a few things on ebay or gumtree or whatever, I have a couple of bulky items that I don't want or need anymore, I should sell them to make a little money and free up some space!
• Enter some competitions.
• Keep an eye out for mse weekly tips email to see if there's anything of use to us in there.
• Read the diaries on here (and maybe a couple of the other boards) to see if I stumble upon any more valuable nuggets of wisdom

Happy MFWing everyone!

I'm a little embarrassed to admit how dense I was being, but another helpful PM from ScotlandM has clarified the benefits of reducing the mortgage term. It boils down to the fact that you can *overpay* 10% of the previous end of year balance in a year. The clue is in the name really - "over" + "pay" - payments over and above your repayments...

Keep the term at 25 years, monthly repayments £602. That year you can overpay 10% of previous year end balance, so say it was a closing balance of 100k, you can overpay 10k. Maximum paid that year £17224.

Reduce the term to 10 years, monthly repayments increase to £1025. You can still overpay 10% of previous year end balance, so sticking with the closing balance of 100k example, you can still overpay 10k. However, you are paying in a lot more that year than you would have been had you not reduced the term. Maximum paid in this case £22300.

It's so obvious, I can't believe it took this long to sink in! I had been thinking of the higher monthly repayment as an overpayment (which I guess it kinda is, but strictly speaking isn't...) that eats into the 10% allowance for the year (which it doesn't). Glad I've got that straight in my head now!

This is all academic right now as we can't even hit the 10% limit yet, and don't want to commit to overpayments by reducing the term yet either. A little further along though we might be confident enough to reduce the term. If we manage to get the mortgage down to 60k in the next three years (that's my target for the MFiT-T3 challenge), recalulating the term to end when the fixed period comes to an end would mean repayments at £1140 per month for the remaining five years. I wouldn't be comfortable committing to that amount right now, but we'll see what the confidence levels and circumstances are like in three years time I'm pretty sure this would save us a good sum of interest over my original plan, and it would be nice not to have to draw down 20k of savings to pay off the balance in year 10!

A big thanks to the very helpful and patient ScotlandM who was kind enough to spell all this out for me

Not a whole lot to say, but it's monthly update time...

Balance as of yesterday morning: £81,513.26

Slowly but surely, it's shrinking